Archive for the 'FeWo' Category

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If you understand Italian and want to know more about buying a flat in Berlin, listen to the interview on the Italiansonline WebRadio…please don’t laugh 😀

Click here and get to the mid on the streaming.

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Living in a vintage gas station, in Schoeneberg

Andreas Meichsner for The New York Times

Have a look at the fabulous article by the New York Times on a very lateral-thinking renovation: from gas station to apartment-cum-art-gallery!

Actually, I remember seeing an Aral gas station teamed up with a bar/restaurant at Schlesisches Tor U-bahn station, close to Club der VisionĂ€re. I wonder if it is seasonal or open all year round…have to check it out.

The full article can be found on the New York Times website together with a beautiful slide show. An excerpt of the article follows.

In Berlin, a renovated gas station

by KIMBERLY BRADLEY

Continue reading ‘Living in a vintage gas station, in Schoeneberg’

…and here are the flats!

color kitchen

It took some time, to refurbish them, to stitch up proper mini-websites, but eventually here they are. Click on the links on the right…

The 1920s flat has a surface of only 54 square meters – plus a mezzanine! – and is located in a beautiful Altbau. The 1960s flat is cuddly, only 30 square meters but its location is magic!

Both are located in the Bayerisches Viertel in Schöneberg…our ideal neighborhood!

And now, what’s up?

baedecker vide pochesOne year ago I kick-started the refurbishing process at our 1920s flat in Schöneberg. In the early spring, while the finishing touches were being added…ooops! we decided to double-up and buy another flat, the Little Cub, a small but cuddly 1960s apartment.

Over the Summer I furnished also the second flat and we spent our holidays in both of them. Ab und zu, we would move from one flat to the other, in order to check our ergonomics intuitions, see if something was missing and make room for friends and family who joined us in beautiful Schöneberg.

We collected lots of enthusiastic feedback.

On our 1920s beauty the most frequent comments were: “Look at this magnificent window!” (you see it now as the Header of this blog). “I loove the touch and feel of the old parquet!”. But also the modern evolution of the flat got the thumbs up, especially the bathroom in gray hues and the surprise mezzanine.

The 1960s Cub flat seduces for its balcony view on to the park and the flood of light, making those 30 square meters airy and open. Its German retro 60s design was enhanced by selecting carefully the furniture. A few pieces, not to crowd the space, but the right ones.

In the meantime, the crisis unfolded. One year ago everybody was scared of banking with a Bad Bank. Markets crashed and the like. There were times we asked ourselves if we had done the right move.

With insight, we realized we bought at the bottom of the market (hopefully!) and our monitoring of Schöneberg real estate prices confirmed a thing or two.

First, good locations and nice properties disappeared from the radar, were scarce on the market and retained their value. Second, more mass-market and common properties were abundant and at cheaper prices. But we didn’t want a property without caractĂšre in the first place, so no regrets. Third, it’s more difficult to get mortgages today.

And now, what’s up?

Rental yields and the financial crisis

New York Times article – Great Homes and Destinations, Germany

MARKET OVERVIEW

Though there was a construction boom in the 1990s after the unification of East and West Germany, the property market in Germany has been relatively flat over the past decade, according to Tobias Just, head of real estate research for Deutsche Bank. Prices are growing slightly in desirable markets like Berlin and Munich, but Mr. Just said most markets were holding steady or experiencing a slight downturn. “We haven’t had a rapid growth period like other markets,” he said, “so there is nothing to correct.” The stability may also be ascribed to Germany’s conservative mortgage system. Over 90 percent of the mortgages issued in Germany have fixed interest rates, and borrowers typically put down 30 percent of the purchase price. “This is a nice cocktail to prevent prices from going through the roof,” Mr. Just said.

Germany’s tenant-friendly laws are another factor in keeping property prices down. Rent control is strict, and evictions are slow and expensive for property owners. The laws favor tenants because “most of the electorate is renting,” he said. Roughly 50 percent of all residential units in Germany are rentals, and many are owned by the government or by nonprofit public welfare agencies. Although there was an influx of foreign investors buying rental units from 2003 to 2006, prices stayed stagnant because of an oversupply of rental units.

The market for luxury homes in the Munich area is small but strong, according to Christian Ehbauer, owner of Re/Max Exclusive in Gruenwald. Older luxury condominiums in Munich cost 6,000 to 9,000 euros per square meter ($695 to $1,040 per square foot), but some new units sell for as much as 12,000 to 16,000 euros per square meter ($1,390 to $1,850 per square foot).

Well-appointed single-family homes in Gruenwald or Starnberg, suburbs south of Munich, cost 1.4 million to 2.8 million euros ($1.7 million to $3.5 million), but Mr. Ehbauer has seen mansions with lake frontage in Starnberg sell for as much as 8 to 12 million euros ($1 million to $15 million).

Berlin Residential Real Estate Market Outlook 2009

A survey of 118 cities in Germany has seen the average rent level in Berlin at 5.58 Euro per sqm per month net rent. This takes Berlin to rank No. 55 with Munich in the lead with an average net rent of 11.36 as shown in a study published by the association of the Berlin-Brandenburg housing corporations. Even in small cities like Jena (7.06), Greifswald (6.49) or LĂŒbeck (6.07) the average rent is currently higher than in Berlin.

Yet another indicator for the development potential of the Berlin residential market. With the current price level for Investment Property at early last year’s level and growing numbers of pressured sales due to “De-Leveraging” where investors sell properties to generate fresh cash the yields have improved significantly. Recently some big investors in the Berlin market like ORCO Germany have sold properties between 2 – 20 % below their book values.

The take-up by the market is relatively slow as most banks require up to 40 % equity to match their lending. “Equity is king” and those who have it can cherry-pick. Any relaxation in this area will depend on the development of the financial crisis and any forecasts on this a currently very vague.

Credit Crunch Could Boost German Property Market

(OPENPRESS) November 26, 2008 — According to a survey by travel portal kayak.co.uk 60 percent of Britons have no intention of canceling their winter holiday plans because of the economic downturn. Meanwhile, Grahame McKenzie of tourism website Travel Mole, has predicted that the global downturn will cause Britons to holiday in locations within Europe, such as Spain and Italy, naming France, Italy and Germany, he added:

“Potentially there may be an upsurge in ferry bookings, so people will be able to shove all their stuff in a car and just jump in with their kids and everything.”

Liam Bailey, chief market analyst for overseas property portal Property Abroad gave us his views on the reports:

“Firstly, it is possible that the findings from the Travel Mole survey go against Grahame McKenzie’s predictions — for this winter anyway — of course depending on whether or not some of the 60 percent have made their winter holiday plans to go further afield than Europe, which I believe is a fairly safe bet. McKenzie’s statements give no indication of whether he meant this winter only or winters for however long the ‘credit crunch’ lasts.” While it is highly likely that some people will decide to holiday in Europe, most Britons already do holiday in Europe, so I can’t see there being a ‘massive upsurge’, but even a slight upsurge could generate a boost in European property markets.”

“McKenzie being right would make the biggest difference to Germany, because German property traditionally has very low rental yields, because of government restrictions, and because of the fact that very few Germans own their own homes meaning that most rentals are residential. This would — possibly very quickly — give Germans the ability to raise their rental rates on short-term leases only, because the government would see the positive effect this could have on the economy combined with the increase in tourism.”

Renovierung, ristrutturazione, refurbishing!

Today there is an interesting article on Deutsche Welle, about an italo-german pair refurbishing flats in Prenzl’berg on a big scale. It’s all about mixing Prussia and italian style, affordable prices in Berlin and entrepreneurial flair. It’s also about a lot of money, and a lot of property.

On a much smaller scale over the next weeks Mein Mann and I will start working on the refurbishment of The Flat. We now have The Project, we need to understand exactly the operational details, order the materials in Berlin (shop locally!) and off we go.

We did our share of number crunching, magazine-reading, scenario-building now we’ve got to start. Also because…the Wohngeld is running! So, we’re reassured of the fact that:

– YES, it was a good idea to buy a flat in Berlin, the price was right and the value was great;

– YES, with the present market turmoil it is even a better idea to invest a bit of extra money in refurbishing The Flat and bringing it to extert its full potential, in the beautiful Kiez;

– YES, in these uncertain times, with such negative newsflow, it is nice to be working on a HARDWARE project, in parallel with those daily worries (inflation, bad news, economic meltdown und so weiter).

One year ago we were emotionally in the no-man’s-land in between our August enthousiastic scouting trip to Berlin (cum-badly-failed-attempt to buy a flat), and the November trip to the Hauptstadt, when Mein Mann found the hidden gem, The Flat.

So we were floating in that lukewarmish atmosphere. We had invested all our holidays on the project. We were disappointed by the first unsuccessful attempt. But we were determined to get over it and be proud owners of our flat by Christmas. We signed our contract on December 20th!

Sometimes in between signing the contact and paying the price/getting the ownership of the flat a few MONTHS can elapse, rather than a few weeks, and that was indeed the case for us. A bit frustrating but worth waiting. After getting the possession of the keys and of The Flat, we’ve been paying taxes to the Finanzamt, opened a bank account, set up utility accounts, have the project prepared and now we’ve just to sign an insurance contract, then the refurbishing can start.

Needless to say we’ve seen many many other flats in the meantime. That is always a lateral and nosy way of visiting the town, plus it’s a very useful exercise. Each time we were reassured on the price-quality relationship of what we had bought. That is a nice feeling indeed. Especially when you’re still facing costs and no revenues yet are flowing in your hands.

We think we “prĂŒften die Angebote sehr genau und pickten uns aus den vielen Objekten am Markt die Rosinen heraus“, we had done our homework, carefully analyzed the market, and cherry-picked successfully.

If you are interested in buying a flat in Berlin, go and see as many flats and as many Kiez as you can. This is the best way to find really what you are looking for. Exercise your personal Guts Feeling, endure a few disappointments, get a feel for the Sense of Place and stick with your list of criteria. Be they sultanas or cherries, you will find the ones you are looking for.

That said, we’re no real estate magnates like the Stoffel or fashion heirs like the Stefanel, but we have an idea or two about refurbishing without destroying. Leveraging hidden beauty without arm-twisting the sense of place.

We want to make the prussian linear beauty of the The Flat blossom, it’s concealed behind a few post-war thin postiche walls, hideous wallpapers and plastic flooring but you can feel it’s definitely there. Yet The Flat must also feel contemporary, and user-friendly too. And the costs must remain down to earth.

Coherence is our guiding muse: with the Altbau, the Kiez, the history of the Bayerisches Viertel, our own taste…and our budget.

Guts feeling

Berlin flat hunters may have googled this article many times (feb 2008), stating that big financial institutions had bought many flats in Berlin. The article was right in predicting a rise in Berlin rents (see previous post). And stating that big financial institutions had been buyers in Berlin: “Cerberus Capital Management and Goldman Sachs’ Whitehall fund have invested 2.1 billion euros since 2004”.

But were these institutions still “long Berlin” in 2008? Could those property be dumped on the market now, if something “went wrong”? According to this Financial Times article, they had sold the property back in 2007. Well, maybe because they wanted a quick buck from the investment, while tenants were happy to remain tenants without morphing into home owners.

It all comes down to your personal investment horizon. Our horizon is well beyond the decade…plus, we love Berlin. Our very personal evaluation of risk is a comparison between our income, the price of flats in Rome and the price of flats in Berlin.

Prices of flats in Berlin=sustainable, plus great city infrastructure. Hence: good value for money.

Prices of flats in Rome=defying gravity, plus poor city infrastructure. Living for your mortgage, no thanks. Hence: too risky.

It’s your personal evaluation of…value that matters in the end.


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